Oriental Bank of Commerce (OBC) is not looking at any base rate cut for now, its Chairman and Managing Director S. L. Bansal has said.
“I am in no mood for any base rate cut now”, Bansal told Business Line soon after the RBI announced its first quarter policy review statement.
This public sector lender’s base rate is currently pegged at 10.25 percent. Base rate is the interest rate below which banks cannot lend.
Bansal had recently said that he would wait for the RBI policy announcement before taking a call on base rate reduction.
OBC had on July 19 put on hold its earlier decision to cut the base rate by 25 basis points to 10 per cent from July 22.
The bank had to retract on the earlier decision in the wake of RBI’s July 15 measures to tighten liquidity in the banking system to stem the rupee slide.
The central bank had also later come up with additional measures to further reduce liquidity.
This had increased the borrowing cost for banks, squeezing their profit margins and thereby curtailing their ability to reduce lending rates.